For the first time, every single Spot Bitcoin ETF had an outflow day, and this led to a total $563 million total outflow for Wednesday. The $BTC price is teetering on the edge of a potential further dump.
FOMC announcement sparks short-lived rally
The FOMC meeting took place on Wednesday, and the Federal Reserve Chairman Jerome Powell said that progress had stalled in bringing inflation back to 2%. With this in mind, he said that interest rates would stay as they were.
After his speech, both the stock market and crypto put on a rally, with bitcoin briefly getting back above $59,000. However, it was short-lived, and it seems that the $BTC rally only succeeded in testing the bottom of its bull flag before coming all the way back down to below $57,000.
Spot Bitcoin ETFs suffer big outflow
It certainly didn’t help that for the very first time since their launch on 11 January every single one of the funds had a net outflow day. The upshot was a rather large $563.7 million total outflow. Even the Blackrock IBIT ETF, after five days of zero input, managed to sell $36.9 million on Wednesday.
It would appear that at least some of those who bought $BTC through the ETFs in the last few months, have developed cold feet and have decided to sell at least a part of what they bought earlier this year. This is probably retail selling, given that institutions are likely to be able to absorb the high volatility, and will potentially be looking to hold for a number of years.
$BTC continuing to roll over
Source: Coingecko/TradingView
Looking at the shorter term time frame, the touch of the bottom of the bull flag and what is now resistance, confirms it as such. It also brings into question the validity of the bull flag. Given that there were not at least three touches of the top of the flag, we may just be seeing a roll over of the $BTC price.
Upside momentum is coming, but $51,000 first?
Source: Coingecko/TradingView
Observing the chart of the weekly time frame, price is looking more likely to come back at least to the $51,000 support level. This all very much depends on how much longer it takes the weekly stochastic RSI to bottom and to then cross back up. A cross up happens roughly every six months, and the ensuing upside momentum would likely be very powerful, and could potentially have the effect of pushing the $BTC price back towards the highs again.
As things stand, it could be several more nerve wracking days before a possible change in price direction. For those holding $BTC this is all just noise. In the big picture, bitcoin is in its bull market, corrections happen, it’s healthy, and these periods do not last.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.
